Tag Archives: Motorola Mobility

Illinois’ Bad Habit Continues: More Targeted Tax Incentives

Illinois’ Community Development Commission is scheduled to meet today to discuss bringing the JMC Steel Group Inc to Chicago by means of tax incentives. The CDC’s plan includes providing the company with $1.1 million in tax-increment financing.

Providing targeted tax incentives is one of Illinois habitually-employed development policies.  However, the recent hike in the corporate income tax rate coupled with the nearing expiration of some of these tax incentives has caused many companies to consider leaving the state.

In 1989 Sears threatened to leave Illinois but was convinced to stay after receiving $178 million in state and local subsidies. Not surprisingly, Sears’ threat to leave surfaced again earlier this year and Illinois’ solution was to offer more tax incentives to get the company to stay.

Other companies that have threatened to leave Illinois this year include, among others, First Navistar International, Motorola Mobility, and CME Group.  Although the plans to convince CME Group to stay are still in the making, $100 million in financial incentives seemed to be enough to keep Motorola around for a while longer.

Not only should Illinois stop focusing on providing targeted tax incentives to get companies to move to the state but it also needs to stop providing additional tax incentives every time a company threatens to leave Illinois. This is a dangerous habit considering tax breaks are set to expire for a 107 companies in Illinois over the next three years.

If Illinois continues to turn to its portfolio of targeted tax incentive programs as a means of achieving development then it will further deteriorate the state’s ability to foster business activity.